KT Submarine to buy cable laying barge from key shareholder

South Korea’s undersea cable company KT Submarine Co. plans to buy a cable laying barge from LS Cable & System Ltd., its major shareholder, to win more orders for offshore wind power projects by improving its construction capabilities.

A cable laying barge is key piece of equipment needed to construct submarine power cables on the sea.

KT Submarine’s board of directors will decide later this month whether to approve the purchase of the 8,000 ton-barge, which can carry 5,000 tons of undersea power cables, from LS Cable & System for as much as 40 billion won ($32.5 million), according to industry sources on Wednesday. The vessel is also equipped with a high-technology system that increases the accuracy of installation on the sea.

LS Cable & System, South Korea’s leading cable manufacturer, in April last year built the barge, its first vessel for submarine cable laying, to expand its business from undersea power cable production to construction.

LS TO FOCUS ON PRODUCTION; KT TO HANDLE CONSTRUCTION, MAINTENANCE

But LS Cable & System decided to sell the barge to KT Submarine, in which the company has a 16.2% stake, to focus on cable production and let the invested firm handle the construction and maintenance business. LS Cable & System is set to become KT Submarine’s top shareholder by exercising call options from April to July of this year to acquire an additional 24.3% stake.

KT Submarine’s submarine cable laying barge sank due to a fire in 2020. The purchase of the LS Cable & System vessel is expected to help KT Submarine secure more deals for undersea power cable construction projects at home and abroad.

The company is expected to log sales of some 100 billion won by participating in LS Cable & System’s submarine cable construction project in Jeju Island, South Korea’s top tourist spot, industry sources said. KT Submarine is also likely to benefit from LS Cable & System’s projects in North America, Europe and Asia, which are worth some 1.2 trillion won.

“The purchase of the barge is predicted to bolster KT Submarine’s growth potential as the global submarine cable market is forecast to grow to 150 trillion won by 2027,” said one of the sources.

Write to Jeong-Soo Hwang at hjs@hankyung.com
Jongwoo Cheon edited this article.